The non-farm payroll (NFP) report is a key economic indicator for the United States. It is intended to represent the total number of paid workers in the U.S excluding farm employees, government employees, private household employees, and employees of non-profit making organizations. The report is released every first Friday of a new month by the Bureau of labor Statistics and is among the most market-moving data points for US Dollars, US equities, Treasuries, and Gold.
The US economy contracted by 1.5% in the first three months of 2022, slightly worse than the initial forecast of a 1.4% decline, with the biggest drag coming from trade. Imports surged to 18.3% compared to the prediction of 17.7%, led by nonfood and nonautomotive consumer goods, as exports dropped slightly to -5.4% compared to the forecast of -5.9% due to nondurable goods. Meanwhile, fixed investment was revised lower but remained robust while housing investment grew much less than initially predicted at 0.4% compared to 2.1%. Consumer spending rose to 3.1%, led by housing and utilities and motor vehicles and parts as spending on gasoline and other energy goods decreased.
April experienced another solid increase in jobs at 428,000 compared to the forecast of 390,000 despite the business struggling to find suitable staff. Although wage pressures were not as intense as expected, this is likely to be a temporary lull as labor market tightness will keep upward pressure on inflation.
The Fed Chairman Jerome Powell during a news conference, noted the burden of inflation on lower-income earners, as he pointed to the commitment of the Fed to restoring price stability, despite market pricing that had leaned heavily towards the Fed hiking rate in June. The annual inflation rate for the United States is 8.3% for the 12 months ended April 2022 after the prior rise of 8.5% as reported by the U.S. labor department.
The U.S. unemployment rate was unchanged at 3.6% in April 2022, as $2.54 billion were paid out as unemployment benefits which is a significant decrease from March 2021, when $5.35 billion were paid as unemployment benefits. Currently, U.S ISM Manufacturing PMI is 55.40, down from 57.10. The United States GDP is projected to trend around $22790.00 billion in 2022 even as persistent inflationary pressures will likely keep price increases elevated, driven by disruptions to global commodity prices associated with the Ukraine war, rising wages associated with labor market tightness, and new COVID-19 in China disrupting global supply chains.
Nevertheless, Traders should brace themselves up for a period of high volatility as an increase in Non-farm payroll will strengthen the United States dollar (USD) while a decrease will weaken the United States dollar (USD).
In response to the news release, trade the forex market with the following trading instruments on the ACT Brokers platform, as the pairs are mostly affected by the data release; EURUSD, GBPUSD, XAUUSD, USDJPY, USDCAD, USDCHF, AUDUSD, NZDUSD, US30, US100, USOIL, US Oil, Facebook, Amazon, Tesla, etc.
Time Schedule for next NFP release:
Date: Friday 3rd June 2022
Time: 1:30pm (GMT + 1)
Time: 1:30 pm (GMT + 1)
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